SHENZHEN Airlines Co plans to raise US$1 billion in an initial public offering as early as next year, the South China Morning Post said yesterday, citing unidentified sources.

Before going public, the airline plans to raise as much as US$200 million selling a 20-percent stake to investors, the Hong Kong-based newspaper said. A fund run by Deutsche Bank AG and hedge funds, including Marathon and Och-Ziff, were among interested parties that began discussions earlier this year, according to the Post. The report didn't say where the IPO will be held.

Zhao Xiang became chairman of Shenzhen Airlines after he bought a 55-percent stake in 2005, the newspaper said. He borrowed money at a high interest rate and now wants to refinance, the unidentified sources were cited as saying. Shenzhen Airlines operates more than 80 domestic and international air routes.